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Politics & MoneyMortgageReal Estate

CFPB shuts down California credit repair company for lying to consumers

CFPB accused Prime Marketing of charging illegal fees for credit repair services

Prime Marketing Holdings, a California credit repair company, was already on the radar of the Consumer Financial Protection Bureau, as several of its associated companies were fined earlier this year by the bureau for misleading consumers and charging illegal fees for credit repair services.

Back in June, the CFPB announced that Prime CreditIMC CapitalCommercial Credit Consultants and Park View Law, formerly known as Prime Law Experts, and several executives in charge of the various companies will pay more than $2 million for the alleged illegal actions.

Several of those companies partnered with Prime Marketing Holdings, which operated under several names, including: Park View Credit, National Credit Advisors and Credit Experts.

Now, the CFPB is doling out its punishment against Prime Marketing and banishing the company from the credit repair business.

The CFPB announced Wednesday that it filed a proposed final judgment that would resolve its previous actions against Prime Marketing Holdings. The bureau filed a lawsuit against Prime Marketing, claiming that the company charged illegal advance fees and misled consumers about the cost and effectiveness of its services and the nature of its money-back guarantee.

The final judgment would permanently ban Prime Marketing from doing business in the credit repair industry and require the company to pay a $150,000 civil money penalty.

According to the CFPB, between Oct. 1, 2014 and at least June 30, 2017, the company charged over 50,000 consumers more than $20 million for credit repair services.

But in the bureau’s lawsuit, which was filed back in September 2016, the CFPB accused Prime Marketing of making “misleading and unsubstantiated statements about its ability to improve consumers’ credit scores by removing negative information from their credit reports.”

The company also “misrepresented and failed to disclose the limitations of its money-back guarantee,” the CFPB said.

According to the CFPB’s complaint, Prime Marketing’s customers included people who were seeking to obtain a mortgage, loan, refinancing or other extension of credit.

The CFPB claimed that at times, Prime Marketing represented during calls to consumers that it is a “mortgage affiliate” or otherwise represented that it can help consumers get a mortgage.

The CFPB said that Prime Marketing allegedly made a number of false promises to its customers, including (taken directly from the CFPB):

  • Charging illegal advance fees: Prime Marketing Holdings charged a variety of fees for its services before demonstrating that the promised results had been achieved as required by law. Specifically, the company charged consumers initial fees that it, at times, claimed were required to obtain special credit reports for consumers. The company also charged set-up fees totaling hundreds of dollars and monthly fees that often equaled $89.99 per month.
  • Misleading consumers about the benefits of its credit repair services: Prime Marketing Holdings misrepresented its ability to remove negative entries on consumers’ credit reports. The company also misrepresented to customers that its credit repair services would, or likely would, result in a substantial increase to consumers’ credit scores, generally by an average of 100 points. The company lacked a reasonable basis for making these claims.
  • Misrepresenting the costs of its services: In some cases, Prime Marketing Holdings failed to disclose to consumers during sales calls that they would be charged a monthly fee.
  • Failing to disclose limits on “money-back guarantee”: Prime Marketing Holdings misrepresented that it offered a money-back guarantee if consumers were unhappy with the results of the company’s services. The company also failed to clearly and conspicuously disclose that the guarantee had significant limitations, including that the consumer had to pay for at least six months of services to be eligible for the guarantee.

To take effect, the proposed final judgment needs approval by the U.S. District Court for the Central District of California.

“Today we are taking action to shut down a company that deceived consumers into paying for credit repair services that did not live up to the company’s promises,” CFPB Director Richard Cordray said. “We remain committed to taking action against companies that mislead consumers into paying illegal fees with false promises.”

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